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Fact from Fiction: Correcting the Record on EuroStack and European Digital Sovereignty

2025-08-28

On August 26, 2025, Donald J. Trump issued a direct ultimatum to Europe over its digital regulation efforts. This was expected. His administration threatens repeatedly to impose "substantial additional Tariffs" and "Export restrictions on our Highly Protected Technology and Chips" against any nation enforcing digital regulations like the DMA. The White House explicitly frames European law as a "discriminatory action" to be punished, a clear act of economic coercion.

This American power move finds leverage in Europe's self-inflicted weakness. For years, Europe prioritized digital regulation over industrial strategy, meticulously crafting rules for a digital world it does not own. This created a policy vacuum where industrial capacity should be, leaving the continent in a state of vassalage where its sovereign right to regulate is held hostage by the economic and technological power of the United States.

The price of this dependency is staggering: an estimated €264 billion flows from European businesses to non-European cloud and software providers every year. In a world where the US administration now openly wields trade as a geopolitical weapon, the old consensus of relying on others has become untenable. The priority must shift immediately from simply regulating to actively building.

The EuroStack Industry Initiative offers the pragmatic response to this crisis. It is an industry-led blueprint to build the industrial muscle Europe desperately needs for its own resilience and security. Yet, even as the threats mount, the public discussion remains clouded by misconceptions that delay action. To move forward, we must correct the record. The following is a detailed, evidence-based refutation of the most common misleading arguments that stand in the way of Europe's digital resurgence.

NB: this is written by a member of the EuroStack Industry Initiative, not an official statement from it. This post expand on a previous post written in May 2025.

Facts

Fact #1: What is the EuroStack?

The EuroStack a strategic blueprint for a comprehensive, sovereign, and interoperable European digital infrastructure. It is not a single product but a complete technological ecosystem encompassing all layers of the digital value chain, from the foundational physical infrastructure—such as semiconductors (chips), compute (cloud, data centers), and connectivity (networks)—to the logical infrastructure of software, platforms, AI frameworks, and data spaces. The core purpose of the EuroStack is to establish European technological independence by federating and enhancing Europe's existing technological assets and capabilities into a cohesive ecosystem built on a foundation of Open Source and open standards, thereby reducing strategic dependencies and ensuring Europe's security, competitiveness, and digital autonomy.

Fact #2: What are EuroStack's Plans?

The EuroStack initiative is a concrete industrial strategy detailed in its White Paper, "Deploying the EuroStack: What's Needed Now." The plan is built on three actionable pillars designed to create a self-sustaining European digital ecosystem.

  • Pillar 1: "Buy European" – Driving Demand. This is the central pillar, focused on transforming public procurement into a strategic tool. The plan is to:

    • Establish a clear, multi-part test for a "European supplier," based on criteria like having legal headquarters, majority of R&D, and ultimate voting control in Europe, as well as immunity from extraterritorial laws like the US CLOUD Act.
    • Set measurable procurement targets, requiring public bodies to allocate a growing portion of their new digital spending to qualified European suppliers (e.g., 25% by 2027, growing to 50% by 2030).
    • Mandate openness and interoperability in all public contracts to prevent vendor lock-in and ensure strategic flexibility.

  • Pillar 2: "Sell European" – Overcoming Fragmentation. This pillar aims to make the rich but fragmented European tech ecosystem more visible, cohesive, and competitive. The plan is to:

    • Create a "European Digital Market Intelligence Hub," a dynamic platform to map European capabilities, identify strategic gaps, and provide reliable data for buyers and policymakers.
    • Champion Open Source and Open Standards to facilitate the creation of integrated solutions from different European providers, breaking down silos and enabling collaboration.

  • Pillar 3: "Fund European" – Catalyzing Strategic Investment. This is not a call for a new, top-down subsidy program. The primary goal is to unlock and steer private and institutional capital. The plan is to:

    • Mobilize private investment by creating market certainty through the "Buy European" pillar.
    • Propose a targeted "EuroStack Fund" to fill specific market gaps where commercial funding is insufficient, such as financing the migration away from proprietary systems, supporting the maintenance of critical Open Source commons, or helping European SMEs to scale.
    • Explore innovative funding sources, such as reallocating existing EU program funds or using a portion of the large fines levied on Big Tech companies under the DMA/DSA.

Fallacies

Fallacy #1: The goal is "complete digital self-reliance" or "owning every layer of the stack."

  • The Misleading Narrative: This argument frames digital sovereignty as a quest for absolute technological autarky, where Europe would need to build and own 100% of its digital infrastructure from scratch, replacing all non-European technology. This is then dismissed as an impossible and counterproductive fantasy.

  • The Reality of the Proposal: The actual objective is strategic resilience, not complete self-reliance. The initiative’s goal is to reverse the dangerous decline of European capabilities at critical layers of the technology stack. It is not about wholesale replacement but about "powering up local assets" to restore a healthy balance. The core issue is that Europe's capacity to produce and maintain key digital technologies has withered, creating an unacceptable dependency. The strategy is to rebuild these capabilities to ensure Europe has choice and control over its digital foundations.

  • Supporting Facts and Arguments:

    • A Focus on Existing Assets: The initiative is explicitly built on the premise that "Europe has tremendous talent and capabilities in the digital space" which are currently suffering from "perennial problem of fragmentation." The strategy is to federate and scale these existing assets, not invent new ones from zero.
    • A Pragmatic, Not Dogmatic, Approach: The goal is to ensure Europe has viable, competitive alternatives. It is a direct response to a market failure, not an ideological crusade for technological purity.

Fallacy #2: The plan is to create a "separate European digital hemisphere" or a "Fortress Europe."

  • The Misleading Narrative: This portrays the initiative as an isolationist project aimed at decoupling Europe from the global digital ecosystem, particularly the transatlantic relationship. It suggests this would harm European companies that operate globally.

  • The Reality of the Proposal: The strategy is to achieve sovereignty through openness, not isolation. The aim is to reduce strategic dependencies, not to sever international ties. A key pillar of the proposal is the mandatory use of open standards and enforceable interoperability. These are principles of connection and collaboration, designed to prevent the very vendor lock-in that characterizes the current market.

  • Supporting Facts and Arguments:

    • Interoperability is Central: Mandating open standards like those in the European Interoperability Framework (EIF 1.0) is a core tenet. This ensures that European systems can seamlessly connect with others, fostering a competitive ecosystem where customers can choose the best components, regardless of origin, without being trapped.
    • Choice and Optionality: The goal is to increase Europe’s choice and agency. The current situation is one of limited options and high switching costs. By fostering a diverse ecosystem of European providers, the initiative creates more optionality, strengthening Europe's position as an interconnected global partner, not an isolated island.

Fallacy #3: The cost will be "trillions of euros" and is therefore fiscally irresponsible.

  • The Misleading Narrative: This argument uses exaggerated, unsubstantiated figures to frame the initiative as prohibitively expensive, suggesting it would divert essential capital from other strategic priorities.

  • The Reality of the Proposal: The "trillions" figure is based entirely on the false premise of building a separate IT stack from scratch. The real strategy is far more targeted and fiscally sound. Crucially, this narrative completely ignores the massive and ongoing cost of inaction.

  • Supporting Facts and Arguments:

    • Quantifiable Cost of Dependency: A recent economic study quantified the annual outflow from European businesses to US providers for cloud and software at €264 billion. This is not a hypothetical future cost; it is a current and massive economic drain. The proposed investment is designed to redirect a portion of this existing spending to build value within Europe.
    • Leveraging Existing Assets: Most of the technologies needed for the EuroStack already exist in Europe. The plan is not to reinvent the wheel, but to better integrate these technologies and leverage the vast, multi-trillion-dollar resource represented by the global Open Source Software ecosystem.
    • Investment, Not Cost: Framing this strategic undertaking as a mere "cost" is a fallacy. It is an investment in Europe’s industrial base, economic future, and long-term security. The returns on this investment include job creation, innovation, and the retention of economic value within the EU.
    • Targeted Mechanisms: The proposal does not call for a blank check. It advocates for targeted, market-based mechanisms, primarily leveraging the immense power of public procurement to create demand, which in turn attracts private investment.

Fallacy #4: It is a "top-down," bureaucratic plan to build "abstract infrastructure."

  • The Misleading Narrative: This claims the initiative is a government-led, centrally planned effort to design a perfect "stack diagram" in a vacuum, ignoring the reality that successful platforms (like AWS) emerge from real-world, user-driven needs.

  • The Reality of the Proposal: This completely inverts the truth. The EuroStack initiative is an industry-led, bottom-up movement driven by over 300 businesses. Its first pillar, the "Buy European" policy, is a demand-side strategy, not a top-down supply-side dictate.

  • Supporting Facts and Arguments:

    • Market-Driven, Not State-Planned: The strategy is not to have regulators design infrastructure. It is to use public and private procurement as a market-making tool. By creating a stable, predictable demand for sovereign and open digital services, it gives European companies the revenue and scale needed to compete. The market, driven by real customer needs, will build the necessary infrastructure.
    • Focus on Solving Problems: The proposal is grounded in solving a real problem for public and private sector customers: a lack of choice and a high risk of being locked into proprietary, non-European systems.

Fallacy #5: Public procurement would become a reckless "playground" that ignores "best value."

  • The Misleading Narrative: This argument suggests that prioritizing European suppliers in public contracts is fiscally irresponsible, abandons the principle of "best value," and would unfairly burden procurement offices.

  • The Reality of the Proposal: The initiative argues for a more sophisticated and strategic definition of "value" that current procurement practices dangerously ignore. The proposed shift in procurement is gradual and modest, aiming for a share of new spending (e.g., 25% by 2027), not a complete overhaul.

  • Supporting Facts and Arguments:

    • Redefining "Value": True "best value" must account for the total cost of ownership, including the often-hidden costs of vendor lock-in, exorbitant data egress fees, and a lack of reversibility. It must also factor in strategic considerations like resilience, data security, and long-term economic (ecosystemic) impact. A procurement decision that creates a permanent dependency is not a good value proposition. We already developed this argument back in May.
    • Strategic Flexibility: The initiative explicitly agrees that the goal is "strategic flexibility, not self-sufficiency." It advocates for tenders that demand modular, multi-vendor systems where components are replaceable, empowering the customer and fostering a competitive market.

Fallacy #6: The "kill switch" is a paranoid fantasy and geopolitical risks are manageable.

  • The Misleading Narrative: This trivializes legitimate concerns about extraterritorial laws (like the US FISA or CLOUD Act) by framing them as an unlikely, all-or-nothing "doomsday scenario." It suggests that since such an event is improbable, the underlying risk can be dismissed.

  • The Reality of the Proposal: The concern is not about a single, sudden event where all services are shut down. It is about the fundamental lack of agency. The risk lies in the potential for "one, two, more services being disabled or degraded," where the decision-making power "lies completely outside of European hands."

  • Supporting Facts and Arguments:

    • Agency vs. Benevolence: Sovereignty is not about predicting the future; it is about having control in a crisis. Relying on the continued benevolence or stable governance of another nation for critical infrastructure is not a viable long-term strategy in a volatile geopolitical environment.
    • Jurisdictional Control is Key: The risks are not theoretical; they are embedded in law. A company ultimately controlled by and headquartered in a non-EU jurisdiction is subject to its laws. The proposed "Buy European" test includes immunity from such extraterritorial laws as a concrete, verifiable criterion to mitigate this specific, well-understood risk.
    • The "kill switch" mechanism has been repeatedly used. This is not a theoretical threat. The US government has already demonstrated its willingness to compel its companies to deny services as a tool of foreign policy:
    • These threats are actively interfering with the EU's sovereign policymaking. Donald Trump’s ultimatum of August 26, 2025, explicitly links the continued existence of European laws like the DMA to punitive tariffs and export restrictions. This creates a chilling effect, forcing a false choice on European leaders: sacrifice your landmark digital regulations or risk economic warfare against your core industries, such as the automotive sector. This dynamic was illustrated by recent trade negotiations, which were widely seen as a capitulation and a descent into "vassalage." Ultimately, this means that Europe’s democratically-enacted laws are being reduced to bargaining chips, with US pressure directly shaping the limits of European sovereignty.